Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: davesd who wrote (13237)	12/13/1997 7:45:00 PM
From: davesd	Read Replies (2) \| Respond to of 70976

Another DRAM perspective... A service of Semiconductor Business News, CMP Media Inc. Story posted at 2:30 p.m. EST/11:30 a.m. PST, 12/12/97 Dataquest says 16-meg DRAMs now selling for two bucks By Jack Robertson Washington -- Dataquest Inc. this week reported that 16-megabit DRAM prices crashed as low as $2.10 each on the U.S. spot market. "We couldn't believe our eyes!" said analysts at the market research firm. Dataquest said prices of 1X16-Mbit DRAMs had plunged 26% to 29% in two weeks, which it called "a fantastic drop" coming on top of a 30 percent price fall in the preceding month. EDO and fast page mode 16-Meg chips last week were selling below the levels of 4-Mbit only nine months ago, according to the American IC Exchange, Aliso Viejo, Calif. AICE said 4X4-Mbit 5-volt fast-page 16-Mbit chips were selling at $2.71 and 1X16-Mbit 5-V EDO had fallen to $2.78. Prices on 64-Mbit parts, which profit-short memory makers had hoped would rescue them from the market bloodletting, also continued a freefall. The 4X16-Mbit 3-V EDO and 16X4-Mbit 3-V EDO both sank as low as $14.69. Other 64-Mbit versions were selling in the $19 rank. Analysts believed most DRAM firms are losing a lot of money at these price levels, and ponder how long the companies can continue to sustain the red ink. The glutted global DRAM market isn't expected to ease up any time soon, casting doubts on earlier predictions that DRAM prices might rebound in 1998. The continued DRAM price crash also holds down the revenue market projections for the enitre semiconductor market, since the memory chips account for such a large portion of industry shipments. dave

To: davesd who wrote (13237)	12/14/1997 1:40:00 AM
From: Carlson	Read Replies (2) \| Respond to of 70976

Dave, With your forecast of the 1999 LEAPS over $30 expiring worthless have you sold naked calls on AMAT. I recently sold the January 1999 60 calls naked and collected over a $3 premium. I noted that these are now trading for 1 9/16. The following premiums are now available for the January 1999 LEAPS: 30call 6 35call 4 3/4 40call 3 3/4 50 call 2 1/2. I have also considered a spread stategy which will work very good if the stock doesn't move into the mid 50s. Sell 2 50 calls for every 40 call that you purchase. Good luck in your trading.

To: davesd who wrote (13237)	12/14/1997 2:56:00 PM
From: Whiskey	Read Replies (1) \| Respond to of 70976

Dave, I find it hard to believe that any company in this business can afford to put off new equipment purchases as long as 1999 or 2000. Technology is increasing so fast any company waiting that long to by new equipment will be so far behind they will never catch up. Lead time on this equipment has to be staggering. This type of equipment is dedicated to performing certain tasks and nothing else to some extent. Its not like a machine that can be used for different projects that can allow a manufacturer to make other items. If he stays with the same equipment for that long he surely won't be around to order any more in the future. In the real world I figure the machinery would have a 6 month to 12 month payback unless the different governments are footing the bills regardless of a manufacturers profit and payments on debt. Best of Luck, Whiskey

To: davesd who wrote (13237)	12/14/1997 3:59:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

Dave: re: the technology boom of the past years is shifting into low gear: Yes, but for how long? Do you think we are at the end of a secular trend, and the pace of technological change (and investment in new fabs) is going to slow for the next 10 years or so? I'm basing my investment strategy on the belief that the exact opposite will happen. If I'm wrong, I'd sure like to know. If you think there is going to be any other industry that grows faster than the semi industry, over the next 10 years, please tell me, and explain in detail. Do you see any evidence that the recent tech/semi/semi-equip downturn is due to anything other than a liquidity crisis at the bottom of the commodity chip cycle? Those downturns have happened repeatedly in the past;they last months, not years; they are always great buying times. This is what I see: 1. Remember that 15-year roadmap from the industry, that BB posted (12513), and I commented on (12536)? They projected an acceleration to every-two-year cycles, lasting through 2006. 2. 0.18 micron and 300mm (sorry about my typo last post, I meant 300 not 200) and copper and probably some other things we don't yet know about will force the stronger (those with cash instead of debt on their balance sheets) to place huge orders with AMAT, beginning (at the very latest) at the end of 1998, and extending for 30 months? A big upturn in orders will cause AMAT's price to spike upward. When is the latest that you think those orders will happen? 3. The weaker players will fade away. This is not a problem for AMAT. Lots of semi companies have gone bust in the last 10 years, as the overall industry has grown tremendously. 4. My computer has a lot more gismos on it today than 4 years ago (modem, sound, CD, piano for the kids); more will be added over the next 4 years (DVD, camera, etc.); all these require more and faster chips. 5. 16 mb memeory chips have had the shortest product life of any generation. This confirms that the pace of change is accelerating. 6. The last downturn based for only two months (July-Sept. 1996), before turning sharply upward. Looking back, I can't find any time AMAT went down, and then stayed down for as long as 12 months. Of course, if you think we are only partway into the downturn, and have several more months of decline in front of us, then the bottom might not happen till June 1998, and the upturn not till the end of 1998. Any predictions for what month the bottom will be? BTW, I'm not predicting new highs in 1998. My prediction was only that the bottom ( and best buying opportunity) would be about 7-98, give or take a few months. That's not so different from your thoughts, is it?

To: davesd who wrote (13237)	12/14/1997 6:01:00 PM
From: Lee Penick	Respond to of 70976

Dave, Re - "...I see no reason why you think the Merced chip will create any new significant markets that will kick start the technology sector....and hence the semi industry. INTC is having enough problems trying to convience the world that they need the PII chip." I don't think this is the correct interpretation of Merced, at all. If this area interests you or effects your investment decisions, you may wish to look at Paul Engels posts on the Intel thread. Briefly, 20 mil transistors, X86 and risk ability, epic circuits for parallel processing, 64 bit IA, and begins to do battle with some of IBMs equipment. A large industry consortium is already built and it is nearly 2 years away. Also plans to be built at .18 micron which has equipment sales implications. good luck, Lee